The Central Bank of Uruguay (BCU) announced today, Wednesday, a reduction of the Monetary Policy Rate (MPR) by 25 basis points to 11.25 percent, given the “gradual decline in inflation” that is expected to continue in the coming months.
The Monetary Policy Committee (Copom) reviewed in a statement that “in the year ended March, inflation stood at 7.33 percent” and thus “confirmed the deceleration observed since October 2022, despite the conjunctural effects of the drought”.
“In the global economic environment, inflation shows rigidity, with a slower decline than expected, and economic activity exhibits signs of slower growth,” it said.
“In Uruguay, activity grew 4.9 percent annual average in 2022, where the first effects of the drought were observed in the last quarter”, he added.
According to Copom, the interest rate reduction “is consistent with the continuity of the contractionary monetary policy and to continue the efforts for the convergence of inflation and its expectations, still rigid, in the monetary policy horizon.”
He added that “the evolution of inflation expectations of the different economic agents will condition future movements of the TPM”.